Read the full stored bill text
Senate
File
614
-
Introduced
SENATE
FILE
614
BY
COMMITTEE
ON
WAYS
AND
MEANS
(SUCCESSOR
TO
SSB
1156)
A
BILL
FOR
An
Act
relating
to
the
administration
of
the
tax
by
the
1
department
of
revenue
by
modifying
provisions
related
to
2
personal
income,
property,
sales
and
use,
motor
fuel,
and
3
inheritance
taxes,
changing
tax
expenditure
reviews,
and
4
including
effective
date
and
retroactive
applicability
5
provisions.
6
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
7
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DIVISION
I
1
DISCLOSURE
OF
TAX
INFORMATION
2
Section
1.
Section
421.19,
subsection
2,
Code
2025,
is
3
amended
by
striking
the
subsection
and
inserting
in
lieu
4
thereof
the
following:
5
2.
The
department
may
notify
federal,
state,
or
local
6
law
enforcement
agencies,
and
may
disclose
state
returns,
7
state
return
information,
state
investigative
information
or
8
audit
information,
or
any
other
state
information,
to
such
law
9
enforcement
agencies,
if
the
department
has
information
that
10
indicates
any
of
the
following:
11
a.
A
person
intentionally
filed
a
false
claim,
affidavit,
12
return,
or
other
information
with
intent
to
evade
tax
or
obtain
13
a
refund,
credit,
or
other
benefit
from
the
department.
14
b.
A
person
failed
to
file
a
return
with
intent
to
evade
a
15
tax
or
filing
requirement.
16
c.
A
person
failed
to
pay
with
the
intent
to
evade
tax.
17
d.
A
person
committed
any
act
or
omission
that
is
a
criminal
18
offense
under
a
provision
of
this
title
administered
by
the
19
department.
20
Sec.
2.
Section
421.19,
subsection
3,
Code
2025,
is
amended
21
to
read
as
follows:
22
3.
Notwithstanding
sections
422.20
and
422.72
,
the
23
department
may
disclose
state
returns,
state
return
24
information,
state
investigative
or
audit
information,
or
any
25
other
state
information
as
provided
under
this
section
.
26
Sec.
3.
Section
422.20,
subsection
3,
paragraph
a,
Code
27
2025,
is
amended
to
read
as
follows:
28
a.
Unless
otherwise
expressly
permitted
by
section
8G.4
,
29
section
11.41
,
section
96.11,
subsection
6
,
section
421.17,
30
subsections
22,
23,
and
26
,
section
421.17,
subsection
27
,
31
paragraph
“k”
,
section
421.17,
subsection
31
,
section
252B.9
,
32
section
321.40,
subsection
6
,
sections
321.120
,
421.19
,
421.28
,
33
421.59
,
421.65
,
422.72
,
and
452A.63
,
and
556.19,
subsection
2,
34
this
section
,
or
another
provision
of
law,
a
tax
return,
return
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information,
or
investigative
or
audit
information
shall
not
1
be
divulged
to
any
person
or
entity,
other
than
the
taxpayer,
2
the
department,
or
internal
revenue
service
for
use
in
a
matter
3
unrelated
to
tax
administration.
4
Sec.
4.
Section
422.72,
subsection
3,
paragraph
a,
Code
5
2025,
is
amended
to
read
as
follows:
6
a.
Unless
otherwise
expressly
permitted
by
section
8G.4
,
7
section
11.41
,
section
96.11,
subsection
6
,
section
421.17,
8
subsections
22,
23,
and
26
,
section
421.17,
subsection
27
,
9
paragraph
“k”
,
section
421.17,
subsection
31
,
section
252B.9
,
10
section
321.40,
subsection
6
,
sections
321.120
,
421.19
,
421.28
,
11
421.65
,
422.20
,
and
452A.63
,
and
section
556.19,
subsection
2,
12
this
section
,
or
another
provision
of
law,
a
tax
return,
return
13
information,
or
investigative
or
audit
information
shall
not
14
be
divulged
to
any
person
or
entity,
other
than
the
taxpayer,
15
the
department,
or
internal
revenue
service
for
use
in
a
matter
16
unrelated
to
tax
administration.
17
Sec.
5.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
18
deemed
of
immediate
importance,
takes
effect
upon
enactment.
19
DIVISION
II
20
ANNUAL
REPORTING
21
Sec.
6.
Section
421.60,
subsection
2,
paragraph
k,
Code
22
2025,
is
amended
by
striking
the
paragraph.
23
Sec.
7.
Section
422.75,
Code
2025,
is
amended
to
read
as
24
follows:
25
422.75
Statistics
——
publication.
26
The
department
shall
prepare
and
publish
an
annual
report
27
which
shall
include
statistics
reasonably
available,
with
28
respect
to
the
operation
of
this
chapter
,
including
amounts
29
collected,
classification
of
taxpayers,
and
such
other
facts
30
as
are
deemed
pertinent
and
valuable.
The
annual
report
shall
31
also
include
the
reports
and
information
required
pursuant
to
32
section
421.60,
subsection
2
,
paragraph
“k”
.
33
DIVISION
III
34
PROPERTY
TAX
——
CHANGES
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Sec.
8.
Section
425.20,
subsection
3,
Code
2025,
is
amended
1
to
read
as
follows:
2
3.
In
case
of
sickness,
absence,
or
other
disability
of
3
the
claimant
or
if,
in
the
judgment
of
the
director
of
revenue
4
or
the
director
of
health
and
human
services
,
as
applicable,
5
good
cause
exists
and
the
claimant
requests
an
extension,
the
6
director
of
health
and
human
services
may
extend
the
time
for
7
filing
a
claim
for
reimbursement
and
the
director
of
revenue
8
may
extend
the
time
for
filing
a
claim
for
credit
.
However,
9
any
further
time
granted
shall
not
extend
beyond
December
31
10
of
the
year
following
the
year
in
which
the
claim
was
required
11
to
be
filed.
Claims
filed
as
a
result
of
this
subsection
shall
12
be
filed
with
the
director
of
health
and
human
services
or
the
13
director
of
revenue,
as
applicable,
who
shall
provide
for
the
14
reimbursement
of
the
claim
to
the
claimant.
15
Sec.
9.
Section
445.60,
Code
2025,
is
amended
to
read
as
16
follows:
17
445.60
Refunding
erroneous
tax.
18
The
board
of
supervisors
shall
direct
the
county
treasurer
19
to
refund
to
the
taxpayer
any
tax
or
portion
of
a
tax
found
to
20
have
been
erroneously
or
illegally
paid,
with
all
interest,
21
fees,
and
costs
actually
paid.
A
refund
shall
not
be
ordered
22
or
made
unless
a
claim
for
refund
is
presented
to
the
board
23
within
two
years
of
the
date
the
tax
was
due,
or
if
appealed
24
to
the
board
of
review,
the
property
assessment
appeal
board,
25
director
of
revenue,
or
district
court,
within
two
years
of
the
26
final
decision.
27
Sec.
10.
EFFECTIVE
DATE.
The
following,
being
deemed
of
28
immediate
importance,
takes
effect
upon
enactment:
29
The
section
of
this
division
of
this
Act
amending
section
30
445.60.
31
DIVISION
IV
32
FARM
TENANCY
INCOME
TAX
EXCLUSION
33
Sec.
11.
Section
422.7,
subsection
14,
paragraph
a,
Code
34
2025,
is
amended
to
read
as
follows:
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a.
Subtract,
to
the
extent
included,
net
income
received
1
by
an
eligible
individual
pursuant
to
a
farm
tenancy
agreement
2
covering
real
property
held
by
the
eligible
individual
for
3
ten
or
more
years,
if
the
eligible
individual
materially
4
participated
in
a
farming
business
for
ten
or
more
years
in
the
5
aggregate
.
6
Sec.
12.
Section
422.7,
subsection
14,
paragraph
f,
Code
7
2025,
is
amended
by
adding
the
following
new
subparagraph:
8
NEW
SUBPARAGRAPH
.
(04)
“Held”
shall
be
determined
with
9
reference
to
the
holding
period
provisions
of
section
1223
of
10
the
Internal
Revenue
Code
and
the
federal
regulations
pursuant
11
thereto.
12
DIVISION
V
13
PASS-THROUGH
ENTITIES
14
Sec.
13.
Section
422.25C,
subsection
2,
Code
2025,
is
15
amended
to
read
as
follows:
16
2.
For
tax
years
beginning
on
or
after
January
1,
2020,
any
17
adjustments
to
a
partnership’s
or
pass-through
entity’s
items
18
of
income,
gain,
loss,
expense,
or
credit,
or
an
adjustment
to
19
such
items
allocated
to
a
partner
that
holds
an
interest
in
a
20
partnership
or
pass-through
entity
for
the
reviewed
year
by
21
the
department
as
a
result
of
a
state
partnership
audit,
shall
22
be
determined
at
the
partnership
level
or
pass-through
entity
23
level
in
the
same
manner
as
provided
by
section
6221(a)
of
the
24
Internal
Revenue
Code
and
the
regulations
thereunder
unless
a
25
different
treatment
is
specifically
provided
in
this
title
.
26
The
provisions
of
sections
6222,
6223,
and
6227
of
the
Internal
27
Revenue
Code
and
the
regulations
thereunder
shall
also
apply
to
28
a
partnership
or
pass-through
entity
and
its
direct
or
indirect
29
partners
in
the
same
manner
as
provided
in
such
sections
unless
30
a
different
treatment
is
specifically
provided
in
this
title
.
31
For
purposes
of
applying
such
sections,
due
account
shall
be
32
made
for
differences
in
federal
and
Iowa
terminology.
The
33
adjustment
provided
by
section
6221(a)
of
the
Internal
Revenue
34
Code
shall
be
determined
as
provided
in
such
section
but
shall
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be
based
on
Iowa
taxable
income
or
other
tax
attributes
of
1
the
partnership
or
pass-through
entity
as
determined
pursuant
2
to
this
chapter
for
the
reviewed
year.
The
department
shall
3
issue
a
notice
of
adjustment
to
the
partnership
or
pass-through
4
entity.
Such
notice
shall
be
treated
as
an
assessment
for
the
5
purposes
of
section
422.25
,
and
the
notice
shall
be
appealable
,
6
except
as
provided
in
section
422.25,
by
the
partnership
or
7
pass-through
entity
pursuant
to
sections
422.28
and
422.29
and
8
shall
be
issued
within
the
time
period
provided
by
section
9
422.25
.
Once
the
adjustments
to
partnership-related
or
10
pass-through
entity-related
items
or
reallocations
of
income,
11
gains,
losses,
expenses,
credits,
and
other
attributes
among
12
such
partners
for
the
reviewed
year
are
finally
determined,
13
the
partnership
or
pass-through
entity
and
any
direct
partners
14
or
indirect
partners
shall
then
be
subject
to
the
provisions
15
of
section
422.25,
subsection
1
,
paragraph
“e”
,
and
section
16
422.25A
in
the
same
manner
as
if
the
state
partnership
audit
17
were
a
federal
partnership
level
audit,
and
as
if
the
final
18
state
partnership
audit
adjustment
were
a
final
federal
19
partnership
adjustment.
The
penalty
exceptions
in
section
20
421.27,
subsection
2
,
paragraphs
“b”
and
“c”
,
shall
not
apply
21
to
a
state
partnership
audit.
22
Sec.
14.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
23
deemed
of
immediate
importance,
takes
effect
upon
enactment.
24
Sec.
15.
RETROACTIVE
APPLICABILITY.
This
division
of
this
25
Act
applies
retroactively
to
January
1,
2024.
26
DIVISION
VI
27
SALES
TAX
CHANGES
28
Sec.
16.
Section
423.2,
subsection
1,
paragraph
b,
Code
29
2025,
is
amended
to
read
as
follows:
30
b.
(1)
Sales
of
building
materials,
supplies,
and
equipment
31
to
owners
,
contractors,
subcontractors,
or
builders
for
the
32
erection
of
buildings
or
the
alteration,
repair,
or
improvement
33
of
real
property
are
retail
sales
of
tangible
personal
property
34
in
whatever
quantity
sold
.
Where
the
owner,
contractor,
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subcontractor,
or
builder
is
also
a
retailer
holding
a
sales
1
or
use
tax
permit
and
transacting
retail
sales
of
building
2
materials,
supplies,
and
equipment,
the
person
shall
purchase
3
such
items
of
tangible
personal
property
without
liability
for
4
the
tax
if
such
property
will
be
subject
to
the
tax
at
the
5
time
of
resale
or
at
the
time
it
is
withdrawn
from
inventory
6
for
construction
purposes.
The
sales
tax
shall
be
due
in
the
7
reporting
period
when
the
materials,
supplies,
and
equipment
8
are
withdrawn
from
inventory
for
construction
purposes
or
9
when
sold
at
retail.
The
tax
shall
not
be
due
when
materials
10
are
withdrawn
from
inventory
for
use
in
construction
outside
11
of
Iowa
and
the
tax
shall
not
apply
to
tangible
personal
12
property
purchased
and
consumed
by
the
manufacturer
as
building
13
materials
in
the
performance
by
the
manufacturer
or
its
14
subcontractor
of
construction
outside
of
Iowa.
The
sale
of
15
carpeting
is
not
a
sale
of
building
materials.
The
sale
of
16
carpeting
to
owners,
contractors,
subcontractors,
or
builders
17
shall
be
treated
as
the
sale
of
ordinary
tangible
personal
18
property
and
subject
to
the
tax
imposed
under
this
subsection
19
and
the
use
tax
Sales
of
building
materials
and
supplies
to
20
contractors,
subcontractors,
or
builders
for
the
erection
of
21
buildings
and
other
structures
or
for
the
reconstruction,
22
alteration,
expansion,
or
remodeling
of
buildings
and
other
23
structures
are
retail
sales
of
tangible
personal
property.
24
Sales
of
building
materials
and
supplies
to
contractors,
25
subcontractors,
or
builders
for
use
in
repairs
to
or
for
26
installation
in
existing
buildings
and
other
structures
27
are
purchases
for
resale.
Sales
of
building
equipment
to
28
contractors,
subcontractors,
or
builders
are
retails
sales
of
29
tangible
personal
property
.
30
(2)
Where
the
owner,
contractor,
subcontractor,
or
builder
31
is
also
a
retailer
holding
a
sales
and
use
tax
permit
and
32
transacting
retail
sales
of
building
materials,
supplies,
and
33
equipment,
the
person
shall
purchase
such
items
of
tangible
34
personal
property
without
liability
for
the
tax
if
such
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property
will
be
subject
to
sales
tax
at
the
time
of
resale
1
or
subject
to
use
tax
at
the
time
the
retailer
withdraws
2
such
property
from
inventory
for
use
by
the
retailer
in
3
erecting
buildings
and
other
structures
or
for
reconstruction,
4
alteration,
expansion,
or
remodeling
of
buildings
and
other
5
structures.
The
tax
shall
be
due
in
the
reporting
period
6
when
the
materials,
supplies,
or
equipment
are
withdrawn
from
7
inventory
or
when
sold
at
retail.
The
tax
shall
not
be
due
when
8
materials
and
supplies
are
withdrawn
from
inventory
for
use
in
9
construction
outside
of
Iowa.
10
(3)
The
sale
of
carpeting
is
not
a
sale
of
building
11
materials.
Sales
of
carpeting
to
owners,
contractors,
12
subcontractors,
or
builders
are
retail
sales
of
tangible
13
personal
property
and
subject
to
tax.
14
Sec.
17.
Section
423.36,
subsection
9,
paragraph
a,
Code
15
2025,
is
amended
to
read
as
follows:
16
a.
Except
as
provided
in
paragraph
“b”
,
purchasers,
users,
17
and
consumers
of
tangible
personal
property,
specified
digital
18
products,
or
enumerated
services
taxed
pursuant
to
subchapter
19
II
or
III
of
this
chapter
or
chapter
423B
may
be
authorized,
20
pursuant
to
rules
adopted
by
the
director,
to
remit
tax
owed
21
directly
to
the
department
instead
of
the
tax
being
collected
22
and
paid
by
the
seller.
To
qualify
for
a
direct
pay
tax
permit,
23
the
purchaser,
user,
or
consumer
must
accrue
a
tax
liability
of
24
more
than
four
eight
thousand
dollars
in
tax
under
subchapters
25
II
and
III
in
a
semimonthly
monthly
period
and
make
deposits
26
and
file
returns
pursuant
to
section
423.31
.
This
authority
27
shall
not
be
granted
or
exercised
except
upon
application
to
28
the
director
and
then
only
after
issuance
by
the
director
of
a
29
direct
pay
tax
permit.
30
DIVISION
VII
31
MOTOR
FUEL
TAXES
32
Sec.
18.
Section
452A.3,
subsection
1,
paragraph
b,
33
unnumbered
paragraph
1,
Code
2025,
is
amended
to
read
as
34
follows:
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On
and
after
July
1,
2030,
an
excise
tax
of
thirty
cents
is
1
imposed
on
each
gallon
of
ethanol
blended
gasoline
classified
2
as
E-15
or
higher.
Before
July
1,
2030,
the
rate
of
the
excise
3
tax
on
ethanol
blended
gasoline
classified
as
E-15
or
higher
4
shall
be
based
on
the
number
of
gallons
of
ethanol
blended
5
gasoline
classified
as
E-15
or
higher
that
are
distributed
6
in
this
state
as
expressed
as
a
percentage
of
the
number
of
7
gallons
of
motor
fuel
distributed
in
this
state,
which
is
8
referred
to
as
the
distribution
percentage.
For
purposes
9
of
this
paragraph
“b”
,
only
ethanol
blended
gasoline
and
10
nonblended
gasoline,
not
including
aviation
gasoline,
shall
be
11
used
in
determining
the
percentage
basis
for
the
excise
tax.
12
The
department
shall
determine
the
percentage
basis
for
each
13
determination
period
beginning
January
1
and
ending
December
31
14
based
on
information
from
reports
submitted
to
the
department
15
for
filing
pursuant
to
section
452A.33
.
Before
June
1,
the
16
department
may
amend
the
distribution
percentage
due
to
a
17
mistake,
if
there
is
a
late
report
filed
by
a
retail
dealer
18
to
the
department
under
section
452A.33,
subsection
1,
or
if
19
the
distribution
percentage
is
not
accurate.
The
rate
for
the
20
excise
tax
shall
apply
for
the
period
beginning
July
1
and
21
ending
June
30
following
the
end
of
the
determination
period.
22
Before
July
1,
2030,
the
rate
of
the
excise
tax
on
each
gallon
23
of
ethanol
blended
gasoline
classified
as
E-15
or
higher
shall
24
be
as
follows:
25
Sec.
19.
Section
452A.3,
subsection
3,
paragraph
a,
26
subparagraph
(2),
unnumbered
paragraph
1,
Code
2025,
is
amended
27
to
read
as
follows:
28
Except
as
otherwise
provided
in
this
section
and
in
this
29
subchapter
,
this
subparagraph
shall
apply
to
the
excise
tax
30
imposed
on
each
gallon
of
biodiesel
blended
fuel
classified
31
as
B-20
or
higher
used
for
any
purpose
for
the
privilege
of
32
operating
motor
vehicles
in
this
state.
On
and
after
July
1,
33
2030,
the
rate
of
the
excise
tax
on
each
gallon
of
biodiesel
34
blended
fuel
classified
as
B-20
or
higher
is
thirty-two
and
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five-tenths
cents.
Before
July
1,
2030,
the
rate
of
the
excise
1
tax
on
each
gallon
of
biodiesel
blended
fuel
classified
as
2
B-20
or
higher
shall
be
based
on
the
number
of
gallons
of
3
biodiesel
blended
fuel
classified
as
B-20
or
higher
that
are
4
distributed
in
this
state
as
expressed
as
a
percentage
of
the
5
number
of
gallons
of
special
fuel
for
diesel
engines
of
motor
6
vehicles
distributed
in
this
state,
which
is
referred
to
as
7
the
distribution
percentage.
The
department
shall
determine
8
the
percentage
basis
for
each
determination
period
beginning
9
January
1
and
ending
December
31
based
on
information
from
10
reports
submitted
to
the
department
for
filing
pursuant
to
11
section
452A.33
.
Before
June
1,
the
department
may
amend
the
12
distribution
percentage
due
to
a
mistake,
if
there
is
a
late
13
report
filed
by
a
retail
dealer
to
the
department
under
section
14
452A.33,
subsection
1,
or
if
the
distribution
percentage
is
15
not
accurate.
The
rate
of
the
excise
tax
shall
apply
for
the
16
period
beginning
July
1
and
ending
June
30
following
the
end
of
17
the
determination
period.
Before
July
1,
2030,
the
rate
of
the
18
excise
tax
on
each
gallon
of
biodiesel
blended
fuel
classified
19
as
B-20
or
higher
shall
be
as
follows:
20
Sec.
20.
Section
452A.15,
subsection
5,
Code
2025,
is
21
amended
to
read
as
follows:
22
5.
The
director
may
impose
a
civil
penalty
against
any
23
person
who
fails
to
timely
file
the
reports
or
keep
the
records
24
required
under
this
section
.
The
penalty
shall
be
one
hundred
25
dollars
for
the
first
violation
and
shall
increase
by
one
26
hundred
dollars
for
each
additional
violation
occurring
in
the
27
calendar
year
in
which
the
first
violation
occurred.
28
Sec.
21.
Section
452A.33,
subsection
2,
unnumbered
29
paragraph
1,
Code
2025,
is
amended
to
read
as
follows:
30
On
or
before
April
1
the
department
shall
deliver
a
report
31
to
the
governor
and
the
legislative
services
agency.
Before
32
June
1,
the
department
may
amend
the
report
due
to
a
mistake,
33
if
there
is
a
late
report
by
a
retail
dealer
under
subsection
34
1,
or
if
the
report
is
not
accurate.
The
report
shall
compile
35
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information
reported
by
retail
dealers
to
the
department
as
1
provided
in
this
section
and
shall
at
least
include
all
of
the
2
following:
3
Sec.
22.
Section
452A.41,
subsection
5,
paragraph
a,
Code
4
2025,
is
amended
to
read
as
follows:
5
a.
For
the
purpose
of
determining
the
amount
of
liability
6
for
the
electric
fuel
tax,
each
dealer
and
user
shall
file
with
7
the
department
not
later
than
July
31
for
the
period
beginning
8
January
1
and
ending
June
30,
and
not
later
than
January
30
9
31
for
the
period
beginning
July
1
and
ending
December
30
31
,
10
a
biannual
tax
return
certified
under
penalties
for
false
11
certification.
The
return
shall
show,
with
reference
to
each
12
location
at
which
fuel
is
delivered
or
placed
by
the
dealer
or
13
user
into
the
battery
or
other
energy
storage
device
of
any
14
electric
motor
vehicle
during
the
next
preceding
six
calendar
15
months,
information
as
required
by
the
department.
On
and
16
after
January
1,
2026,
the
department
may
require
by
rule
that
17
such
tax
returns
be
filed
quarterly.
18
Sec.
23.
Section
452A.44,
Code
2025,
is
amended
by
adding
19
the
following
new
subsection:
20
NEW
SUBSECTION
.
4.
If
electric
fuel
is
sold
or
dispensed
21
for
a
nontaxable
purpose,
the
purchaser
may
complete
and
22
provide
an
exemption
certificate
produced
by
the
department
to
23
the
license
holder.
24
DIVISION
VIII
25
INHERITANCE
TAX
——
FUTURE
CODE
CHANGES
DUE
TO
REPEAL
26
Sec.
24.
Section
12D.9,
subsection
3,
Code
2025,
is
amended
27
to
read
as
follows:
28
3.
State
For
a
death
occurring
before
January
1,
2025,
state
29
inheritance
tax
treatment
of
interests
in
Iowa
educational
30
savings
plans
shall
be
as
provided
in
section
450.4,
subsection
31
8
.
This
subsection
shall
apply
to
all
Iowa
educational
savings
32
plans
existing
on
or
after
July
1,
1998.
33
Sec.
25.
Section
12I.8,
subsection
3,
Code
2025,
is
amended
34
to
read
as
follows:
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3.
State
For
a
death
occurring
before
January
1,
2025,
state
1
inheritance
tax
treatment
of
interests
in
Iowa
ABLE
savings
2
plans
shall
be
as
provided
in
section
450.4,
subsection
9
.
3
Sec.
26.
Section
12I.10,
subsection
3,
Code
2025,
is
amended
4
to
read
as
follows:
5
3.
State
For
a
death
occurring
before
January
1,
2025,
state
6
inheritance
tax
treatment
of
interests
in
the
qualified
ABLE
7
program
with
which
the
state
has
contracted
pursuant
to
this
8
section
shall
be
as
provided
in
section
450.4,
subsection
9
.
9
Sec.
27.
Section
16.177,
subsection
8,
Code
2025,
is
amended
10
to
read
as
follows:
11
8.
Bonds
issued
under
this
section
are
declared
to
be
issued
12
for
an
essential
public
and
governmental
purpose
and
all
bonds
13
issued
under
this
section
shall
be
exempt
from
taxation
by
the
14
state
of
Iowa
and
the
interest
on
the
bonds
shall
be
exempt
15
from
the
state
income
tax
and
the
any
state
inheritance
tax.
16
Sec.
28.
Section
321.47,
subsection
2,
paragraph
a,
Code
17
2025,
is
amended
to
read
as
follows:
18
a.
The
persons
entitled
under
the
laws
of
descent
and
19
distribution
to
the
possession
and
ownership
of
a
vehicle
owned
20
in
whole
or
in
part
by
a
decedent
who
died
intestate,
upon
21
filing
an
affidavit
stating
the
name
and
date
of
death
of
the
22
decedent,
the
right
to
possession
and
ownership
of
the
persons
23
filing
the
affidavit,
and
that
there
has
been
no
administration
24
of
the
decedent’s
estate,
which
instrument
must
also
contain
25
an
agreement
by
the
affiant
to
indemnify
creditors
of
the
26
decedent
who
would
be
entitled
to
levy
execution
upon
the
motor
27
vehicle
to
the
extent
of
the
value
of
the
motor
vehicle,
shall,
28
upon
complying
with
the
other
title
transfer
requirements
of
29
this
chapter
,
be
issued
a
registration
card
for
the
decedent’s
30
interest
in
the
vehicle
and
a
certificate
of
title
to
the
31
vehicle.
If
a
decedent
died
testate,
and
either
the
will
is
32
not
probated
or
is
admitted
to
probate
without
administration,
33
the
persons
entitled
to
the
possession
and
ownership
of
34
a
vehicle
owned
in
whole
or
in
part
by
the
decedent
may
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file
an
affidavit
and,
upon
complying
with
the
other
title
1
transfer
requirements
of
this
chapter
,
shall
be
issued
a
2
registration
card
for
the
decedent’s
interest
in
the
vehicle
3
and
a
certificate
of
title
to
the
vehicle.
The
affidavit
4
must
contain
the
same
information
and
indemnity
agreement
5
as
is
required
in
cases
of
intestacy
under
this
subsection
.
6
Chapter
450
is
not
For
a
death
occurring
before
January
1,
7
2025,
a
requirement
of
chapter
450
shall
not
be
considered
8
satisfied
by
the
filing
of
the
affidavit
provided
for
in
this
9
subsection
.
If,
from
the
records
in
the
office
of
the
county
10
treasurer,
there
appear
to
be
any
liens
on
the
vehicle,
the
11
certificate
of
title
must
contain
a
statement
of
the
liens
12
unless
the
application
is
accompanied
by
proper
evidence
of
13
the
satisfaction
or
extinction
of
such
liens.
Evidence
of
14
extinction
includes
but
is
not
limited
to
an
affidavit
of
the
15
applicant
stating
that
a
security
interest
was
foreclosed
as
16
provided
in
chapter
554,
article
9,
part
6
.
The
department
17
shall
waive
the
certificate
of
title
fee
and
surcharge
required
18
under
sections
321.20
,
321.20A
,
321.23
,
321.46
,
321.52
,
and
19
321.52A
if
the
person
entitled
to
possession
and
ownership
of
20
a
vehicle,
as
provided
in
this
subsection
,
is
the
surviving
21
spouse
of
a
decedent.
22
Sec.
29.
Section
331.602,
subsection
23,
Code
2025,
is
23
amended
to
read
as
follows:
24
23.
Forward
For
deaths
occurring
before
January
1,
2025,
25
forward
to
the
director
of
revenue
a
copy
of
any
deed,
bill
of
26
sale,
or
other
transfer
which
shows
that
it
is
made
or
intended
27
to
take
effect
at
or
after
the
death
of
the
person
executing
28
the
instrument
as
provided
in
section
450.81
.
29
Sec.
30.
Section
331.756,
subsection
57,
Code
2025,
is
30
amended
to
read
as
follows:
31
57.
Represent
For
deaths
occurring
before
January
1,
2025,
32
represent
the
state
in
litigation
relating
to
the
inheritance
33
tax
if
requested
by
the
department
of
revenue
as
provided
in
34
section
450.1
.
35
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Sec.
31.
Section
421.27,
subsection
1,
paragraph
d,
1
subparagraph
(13),
Code
2025,
is
amended
to
read
as
follows:
2
(13)
That
For
a
death
occurring
before
January
1,
2025,
3
that
an
Iowa
inheritance
tax
return
is
filed
for
an
estate
4
within
the
later
of
nine
months
from
the
date
of
death
or
sixty
5
days
from
the
filing
of
a
disclaimer
by
the
beneficiary
of
the
6
estate
refusing
to
take
the
property
or
right
or
interest
in
7
the
property.
8
Sec.
32.
Section
421.60,
subsection
2,
paragraph
c,
9
subparagraph
(1),
Code
2025,
is
amended
to
read
as
follows:
10
(1)
If
the
notice
of
assessment
or
denial
of
a
claim
for
11
refund
relates
to
a
tax
return
filed
pursuant
to
section
12
422.14
,
or
pursuant
to
chapter
450
for
a
death
occurring
before
13
January
1,
2025,
by
the
taxpayer
which
designates
an
individual
14
as
an
authorized
representative
of
the
taxpayer
with
respect
to
15
that
return,
or
if
a
power
of
attorney
has
been
filed
with
the
16
department
by
the
taxpayer
which
designates
an
individual
as
17
an
authorized
representative
of
the
taxpayer
with
respect
to
18
any
tax
that
is
included
in
the
notice
of
assessment
or
denial
19
of
a
claim
for
refund,
a
copy
of
the
notice
together
with
any
20
additional
information
required
to
be
sent
to
the
taxpayer
21
shall
be
sent
to
the
authorized
representative
as
well.
22
Sec.
33.
Section
422.27,
subsection
1,
Code
2025,
is
amended
23
to
read
as
follows:
24
1.
A
final
account
of
a
personal
representative
,
as
defined
25
in
section
450.1
,
shall
not
be
allowed
by
any
court
unless
the
26
account
shows,
and
the
judge
of
the
court
finds,
that
all
taxes
27
imposed
by
this
subchapter
upon
the
personal
representative,
28
which
have
become
payable,
have
been
paid,
and
that
all
taxes
29
which
may
become
due
are
secured
by
bond
or
deposit,
or
are
30
otherwise
secured.
The
certificate
of
acquittances
of
the
31
department
of
revenue
is
conclusive
as
to
the
payment
of
the
32
tax
to
the
extent
of
the
acquittance.
This
subsection
does
33
not
apply
if
all
property
in
the
estate
of
a
decedent
is
34
held
in
joint
tenancy
with
right
of
survivorship
by
husband
35
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and
wife
alone.
For
purposes
of
this
subsection,
“personal
1
representative”
means
an
administrator,
executor,
or
trustee
as
2
each
is
defined
in
section
633.3.
3
Sec.
34.
Section
496C.14,
subsection
6,
paragraph
h,
Code
4
2025,
is
amended
to
read
as
follows:
5
h.
Notwithstanding
the
provisions
of
this
section
,
6
payment
of
any
part
of
the
purchase
price
for
shares
of
a
7
deceased
shareholder
shall
not
be
required
until
the
executor
8
or
administrator
of
the
deceased
shareholder
provides
9
any
indemnity,
release,
or
other
document
from
any
taxing
10
authority,
which
is
reasonably
necessary
to
protect
the
11
corporation
against
liability
for
any
estate
,
inheritance,
and
12
death
taxes
tax,
or
any
inheritance
tax
for
a
death
occurring
13
before
January
1,
2025
.
14
Sec.
35.
Section
524.805,
subsection
8,
Code
2025,
is
15
amended
to
read
as
follows:
16
8.
A
state
bank
may
receive
deposits
from
one
or
more
17
persons
with
the
provision
that
upon
the
death
of
the
18
depositors
the
deposit
account
shall
be
the
property
of
the
19
person
or
persons
designated
by
the
deceased
depositors
as
20
shown
on
the
deposit
account
records
of
the
state
bank.
After
21
payment
by
the
state
bank,
the
proceeds
shall
remain
subject
22
to
the
any
debts
of
the
decedent
and
the
any
payment
of
Iowa
23
inheritance
tax
,
if
any
for
a
death
occurring
prior
to
January
24
1,
2025
.
A
state
bank
paying
the
person
or
persons
designated
25
shall
not
be
liable
as
a
result
of
that
action
for
any
debts
26
of
the
decedent
or
for
any
estate,
inheritance,
or
succession
27
taxes
which
may
be
due
this
state.
28
Sec.
36.
Section
541A.2,
subsection
6,
unnumbered
paragraph
29
1,
Code
2025,
is
amended
to
read
as
follows:
30
An
individual
development
account
closed
in
accordance
31
with
this
subsection
is
not
subject
to
the
limitations
and
32
benefits
provided
by
this
chapter
but
is
subject
to
state
tax
33
in
accordance
with
the
provisions
of
section
422.7,
subsection
34
17
,
and
in
accordance
with
the
provisions
of
section
450.4,
35
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subsection
6
,
for
a
death
occurring
before
January
1,
2025
.
An
1
individual
development
account
may
be
closed
for
any
of
the
2
following
reasons:
3
Sec.
37.
Section
602.8102,
subsection
63,
Code
2025,
is
4
amended
to
read
as
follows:
5
63.
Carry
out
duties
relating
to
the
inheritance
tax
as
6
provided
in
chapter
450
for
deaths
occurring
before
January
1,
7
2025
.
8
Sec.
38.
Section
633.21,
Code
2025,
is
amended
to
read
as
9
follows:
10
633.21
Appraisers’
fees
and
referees’
fees
fixed
by
rule.
11
The
district
judges
of
each
judicial
district
shall
by
rule
12
fix
the
fees
of
probate
referees,
and
also
provide,
insofar
as
13
practicable,
a
uniform
schedule
of
compensation
for
inheritance
14
tax
appraisers,
other
appraisers,
brokers,
and
agents
employed
15
at
estate
expense.
16
Sec.
39.
Section
633.31,
subsection
2,
paragraph
a,
Code
17
2025,
is
amended
to
read
as
follows:
18
a.
For
services
performed
in
short
form
probates
19
pursuant
to
sections
450.22
and
450.44
for
deaths
occurring
20
before
January
1,
2025
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
$
15.00
21
Sec.
40.
Section
633.356,
subsection
1,
unnumbered
22
paragraph
1,
Code
2025,
is
amended
to
read
as
follows:
23
When
the
gross
value
of
the
decedent’s
personal
property
24
that
would
otherwise
be
distributed
by
will
or
intestate
25
succession
is
or
has
been,
at
any
time
since
the
decedent’s
26
death,
fifty
thousand
dollars
or
less
and
there
is
no
real
27
property
,
or
for
deaths
occurring
before
January
1,
2025,
the
28
real
property
passes
to
persons
exempt
from
inheritance
tax
29
as
joint
tenants
with
full
rights
of
survivorship
pursuant
to
30
chapter
450
,
and
if
forty
days
have
elapsed
since
the
death
of
31
the
decedent,
a
successor
as
defined
in
subsection
2
may,
by
32
furnishing
an
affidavit
prepared
pursuant
to
subsection
3
or
33
8
,
and
without
procuring
letters
of
appointment,
do
any
of
the
34
following
with
respect
to
one
or
more
items
of
such
personal
35
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property:
1
Sec.
41.
Section
633.356,
subsection
3,
paragraph
a,
2
subparagraph
(3),
Code
2025,
is
amended
to
read
as
follows:
3
(3)
That
the
gross
value
of
the
decedent’s
personal
property
4
that
would
otherwise
be
distributed
by
will
or
intestate
5
succession
is,
or
has
been
at
any
time
since
the
decedent’s
6
death,
fifty
thousand
dollars
or
less
and
there
is
no
real
7
property
,
or
for
deaths
occurring
before
January
1,
2025,
the
8
real
property
passes
to
persons
exempt
from
inheritance
tax
9
as
joint
tenants
with
full
rights
of
survivorship
pursuant
to
10
chapter
450
.
11
Sec.
42.
Section
633.356,
subsection
3,
paragraph
a,
12
subparagraph
(10),
Code
2025,
is
amended
to
read
as
follows:
13
(10)
That
no
inheritance
or
other
taxes
are
owed
to
the
14
department
of
revenue
for
a
death
occurring
prior
to
January
1,
15
2025
,
or
if
taxes
are
owed,
that
the
taxes
will
be
paid
to
the
16
extent
of
funds
received
pursuant
to
the
affidavit.
17
Sec.
43.
Section
633.356,
subsection
9,
Code
2025,
is
18
amended
to
read
as
follows:
19
9.
Upon
receipt
of
an
affidavit
under
subsection
3
and
20
reasonable
proof
under
subsection
5
of
the
identity
of
each
21
successor
seeking
distribution
by
virtue
of
the
affidavit,
22
the
holder
of
the
property
shall
disclose
to
the
affiant
23
whether
the
value
of
the
property
held
by
the
holder
is,
or
has
24
been
at
any
time
since
the
decedent’s
death,
fifty
thousand
25
dollars
or
less.
An
affidavit
furnished
for
the
purpose
of
26
determining
whether
the
value
of
the
property
is,
or
has
27
been
at
any
time
since
the
decedent’s
death,
fifty
thousand
28
dollars
or
less
need
not
contain
the
language
required
under
29
subsection
3
,
paragraph
“a”
,
subparagraph
(3),
but
shall
state
30
that
the
affiant
reasonably
believes
that
the
gross
value
31
of
the
decedent’s
personal
property
that
would
otherwise
be
32
distributed
by
will
or
intestate
succession
is,
or
has
been
at
33
any
time
since
the
decedent’s
death,
fifty
thousand
dollars
34
or
less
and
there
is
no
real
property
or
for
deaths
occurring
35
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before
January
1,
2025,
the
real
property
passes
to
persons
1
exempt
from
inheritance
tax
as
joint
tenants
with
full
rights
2
of
survivorship
pursuant
to
chapter
450
.
3
Sec.
44.
Section
633.361,
subsection
12,
Code
2025,
is
4
amended
to
read
as
follows:
5
12.
A
listing
of
all
other
items,
with
estimated
values,
6
which
are
subject
to
Iowa
inheritance
tax
for
deaths
occurring
7
before
January
1,
2025,
or
federal
estate
tax.
8
Sec.
45.
Section
633.365,
Code
2025,
is
amended
to
read
as
9
follows:
10
633.365
Appraisement.
11
Property
belonging
to
the
estate
need
not
be
appraised
12
unless
required
for
inheritance
tax
purposes
for
deaths
13
occurring
before
January
1,
2025
,
under
the
provisions
of
this
14
probate
code,
or
by
order
of
court.
15
Sec.
46.
Section
633.399,
Code
2025,
is
amended
to
read
as
16
follows:
17
633.399
Report
for
approval.
18
After
making
any
such
sale,
mortgage,
exchange
or
lease
19
of
real
property,
the
personal
representative
shall
make
20
a
verified
report
thereof
to
the
court.
The
court
shall
21
examine
said
report,
and
if
satisfied
that
the
sale,
mortgage,
22
exchange,
or
lease
has
been
at
a
price
and
upon
terms
23
advantageous
to
the
estate,
and,
in
all
respects,
made
in
24
conformity
with
law,
and
that
it
ought
to
be
confirmed,
shall
25
confirm
the
same
and
order
the
personal
representative
to
26
deliver
a
deed,
mortgage,
lease
or
other
proper
instruments
27
to
the
persons
entitled
thereto;
provided,
however,
that
in
28
the
event
said
real
property
has
been
sold
at
private
sale
29
without
an
appraisal
for
inheritance
tax
purposes
for
a
death
30
occurring
before
January
1,
2025,
or
for
purpose
of
such
sale,
31
or,
if
it
has
been
so
appraised
and
has
been
sold
at
private
32
sale
for
less
than
the
appraised
value
thereof,
then,
upon
the
33
filing
of
such
report,
the
court
may
enter
an
order
fixing
a
34
time
and
place
for
hearing
thereon
and
prescribe
a
notice
of
35
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such
hearing
to
be
served
upon
all
interested
persons,
any
one
1
of
whom,
prior
to
the
time
fixed
for
such
hearing,
may
file
2
written
objections
to
the
entry
of
an
order
approving
said
3
sale.
If
not
satisfied
that
the
sale,
mortgage,
exchange,
or
4
lease
has
been
made
in
conformity
with
law
and
that
it
is
to
the
5
best
interests
of
the
estate,
the
court
may
reject
the
sale,
6
mortgage,
exchange,
or
lease,
and
enter
such
orders
as
the
7
court
may
deem
advisable.
8
Sec.
47.
Section
633.477,
subsection
10,
Code
2025,
is
9
amended
to
read
as
follows:
10
10.
A
statement
as
to
whether
or
not
all
statutory
11
requirements
pertaining
to
taxes
have
been
complied
with
12
including
whether
the
federal
estate
tax
due
has
been
paid,
13
whether
a
lien
continues
to
exist
for
any
federal
estate
tax,
14
and
whether
inheritance
tax
was
paid
or
a
return
was
filed
in
15
this
state
for
a
death
occurring
before
January
1,
2025
.
16
Sec.
48.
Section
633.479,
subsection
2,
paragraph
a,
17
subparagraph
(5),
Code
2025,
is
amended
to
read
as
follows:
18
(5)
Compliance
with
sections
section
422.27
,
and
section
19
450.58
for
deaths
occurring
before
January
1,
2025,
have
been
20
fulfilled.
21
Sec.
49.
Section
633.481,
Code
2025,
is
amended
to
read
as
22
follows:
23
633.481
Certificate
to
county
recorder
for
tax
purposes
24
without
administration.
25
When
an
inventory
or
report
is
filed
under
section
450.22
for
26
deaths
occurring
before
January
1,
2025
,
without
administration
27
of
the
estate
of
the
decedent,
the
heir
or
heir’s
attorney
28
shall
prepare
and
deliver
to
the
county
recorder
of
the
county
29
in
which
the
real
estate
is
situated
a
certificate
pertaining
30
to
each
parcel
of
real
estate
described
in
the
inventory
or
31
report.
Any
fees
for
certificates
or
recording
fees
required
32
by
this
section
or
section
633.480
shall
be
assessed
as
costs
33
of
administration.
The
fees
for
recording
and
indexing
the
34
instrument
shall
be
as
provided
in
section
331.604
.
The
county
35
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614
recorder
shall
deliver
the
certificates
to
the
county
auditor
1
as
provided
in
section
558.58
.
2
Sec.
50.
Section
635.7,
subsection
1,
Code
2025,
is
amended
3
to
read
as
follows:
4
1.
The
personal
representative
is
required
to
file
the
5
report
and
inventory
for
which
provision
is
made
in
section
6
633.361
,
including
all
probate
and
nonprobate
assets.
This
7
chapter
does
not
exempt
the
personal
representative
from
8
complying
with
the
requirements
of
section
422.27
,
450.22
,
9
450.58
,
633.480
,
or
633.481
,
and
the
administration
of
an
10
estate
whether
converted
to
or
from
a
small
estate
shall
be
11
considered
one
proceeding
pursuant
to
section
633.330
.
For
12
a
death
occurring
before
January
1,
2025,
this
chapter
does
13
not
exempt
the
personal
representative
from
complying
with
the
14
requirements
of
section
450.22
or
450.58.
15
Sec.
51.
Section
635.8,
subsection
1,
paragraph
e,
Code
16
2025,
is
amended
to
read
as
follows:
17
e.
A
statement
that
all
statutory
requirements
pertaining
to
18
taxes
have
been
complied
with,
including
whether
federal
estate
19
tax
due
has
been
paid,
whether
a
lien
continues
to
exist
for
20
any
federal
estate
tax,
and
whether
inheritance
tax
was
paid
21
or
a
tax
return
was
filed
in
this
state
for
a
death
occurring
22
before
January
1,
2025
.
23
Sec.
52.
Section
654.16,
subsection
2,
Code
2025,
is
amended
24
to
read
as
follows:
25
2.
If
a
homestead
is
designated,
the
court
shall
determine
26
the
fair
market
value
of
the
designated
homestead
before
27
the
sheriff’s
sale.
The
court
may
consult
with
the
county
28
appraisers
appointed
pursuant
to
section
450.24
for
deaths
29
occurring
before
January
1,
2025
,
or
with
one
or
more
30
independent
appraisers,
to
determine
the
fair
market
value
of
31
the
designated
homestead.
32
Sec.
53.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
33
deemed
of
immediate
importance,
takes
effect
upon
enactment.
34
Sec.
54.
RETROACTIVE
APPLICABILITY.
This
division
of
this
35
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614
Act
applies
retroactively
to
January
1,
2025,
to
the
estates
of
1
decedents
dying
on
or
after
January
1,
2025.
2
DIVISION
IX
3
LUMP
SUM
DISTRIBUTION
OF
RETIREMENT
INCOME
4
Sec.
55.
Section
422.5,
subsection
7,
Code
2025,
is
amended
5
to
read
as
follows:
6
7.
a.
In
addition
to
the
other
taxes
imposed
by
this
7
section
,
a
tax
is
imposed
,
except
under
paragraph
“b”
,
on
the
8
amount
of
a
lump
sum
distribution
for
which
the
taxpayer
has
9
elected
under
section
402(e)
of
the
Internal
Revenue
Code
to
10
be
separately
taxed
for
federal
income
tax
purposes
for
the
11
tax
year.
The
rate
of
tax
is
equal
to
twenty-five
percent
of
12
the
separate
federal
tax
imposed
on
the
amount
of
the
lump
13
sum
distribution.
A
nonresident
is
liable
for
this
tax
only
14
on
that
portion
of
the
lump
sum
distribution
allocable
to
15
Iowa.
The
total
amount
of
the
lump
sum
distribution
subject
16
to
separate
federal
tax
shall
be
included
in
net
income
for
17
purposes
of
determining
eligibility
under
subsections
2
and
3
,
18
as
applicable
,
except
the
amount
of
the
lump
sum
distribution
19
exempt
from
state
tax
in
paragraph
“b”
shall
not
be
included
.
20
b.
The
amount
of
a
lump
sum
distribution
that
is
received
21
from
a
governmental
or
other
pension
or
retirement
plan,
22
including
defined
benefit
or
defined
contribution
plans,
23
annuities,
individual
retirement
accounts,
plans
maintained
or
24
contributed
to
by
an
employer,
or
maintained
or
contributed
25
to
by
a
self-employed
person
as
an
employer,
and
deferred
26
compensation
plans
or
any
earnings
attributable
to
the
deferred
27
compensation
plans
is
exempt
from
state
tax
imposed
under
28
paragraph
“a”
if
received
by
a
person
who
is
disabled,
or
is
29
fifty-five
years
of
age
or
older,
or
is
the
surviving
spouse
of
30
an
individual
or
is
a
survivor
having
an
insurable
interest
in
31
an
individual
who
would
have
qualified
for
the
exemption
under
32
this
subsection
for
the
tax
year.
33
Sec.
56.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
34
deemed
of
immediate
importance,
takes
effect
upon
enactment.
35
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Sec.
57.
RETROACTIVE
APPLICABILITY.
This
division
of
this
1
Act
applies
retroactively
to
January
1,
2025,
for
tax
years
2
beginning
on
or
after
that
date.
3
DIVISION
X
4
ESTIMATED
TAX
THRESHOLD
5
Sec.
58.
Section
422.16,
subsection
12,
paragraph
a,
6
subparagraph
(1),
Code
2025,
is
amended
to
read
as
follows:
7
(1)
Taxpayers
filing
a
return
shall
make
estimated
tax
8
payments
if
their
Iowa
income
tax
liability
can
reasonably
be
9
expected
to
amount
to
two
hundred
one
thousand
dollars
or
more
10
for
the
year.
11
Sec.
59.
EFFECTIVE
DATE.
This
division
of
this
Act
takes
12
effect
January
1,
2026.
13
Sec.
60.
APPLICABILITY.
This
division
of
this
Act
applies
14
to
tax
years
beginning
on
or
after
January
1,
2026.
15
DIVISION
XI
16
TAX
EXPENDITURE
REVIEW
17
Sec.
61.
Section
2.48,
subsection
2,
paragraph
a,
18
subparagraph
(1),
Code
2025,
is
amended
to
read
as
follows:
19
(1)
The
department
administering
a
tax
expenditure
20
described
in
subsection
3
shall
engage
in
a
review
of
the
tax
21
expenditure
based
upon
the
schedule
in
subsection
3
,
unless
the
22
tax
expenditure
is
repealed
.
For
purposes
of
this
section,
23
a
tax
expenditure
is
considered
repealed
if
a
zero
amount
24
remains
available
to
be
awarded,
issued,
or
claimed
under
law.
25
If
multiple
departments
administer
the
tax
expenditure,
the
26
departments
shall
cooperate
in
the
review.
27
Sec.
62.
Section
2.48,
subsection
3,
paragraph
b,
28
subparagraph
(1),
Code
2025,
is
amended
by
striking
the
29
subparagraph.
30
Sec.
63.
Section
2.48,
subsection
3,
paragraph
d,
31
subparagraphs
(3)
and
(5),
Code
2025,
are
amended
by
striking
32
the
subparagraphs.
33
Sec.
64.
Section
2.48,
subsection
3,
paragraph
e,
34
subparagraph
(4),
Code
2025,
is
amended
by
striking
the
35
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614
subparagraph.
1
Sec.
65.
2017
Iowa
Acts,
chapter
29,
section
169,
is
amended
2
to
read
as
follows:
3
SEC.
169.
EFFECTIVE
DATE.
The
following
provision
or
4
provisions
in
Division
I
of
this
Act
take
effect
July
1,
2030
5
2039
:
6
1.
The
section
of
this
Act
amending
section
2.48,
subsection
7
3,
paragraph
“h”.
8
DIVISION
XII
9
LIMITATIONS
ON
SALES
TAX
EXEMPTIONS
AND
REFUNDS
AND
TRANSFERS
10
TO
THE
ENERGY
INFRASTRUCTURE
REVOLVING
FUND
11
Sec.
66.
Section
423.2A,
subsection
2,
Code
2025,
is
amended
12
by
adding
the
following
new
paragraph:
13
NEW
PARAGRAPH
.
h.
Beginning
July
1,
2025,
transfer
to
14
the
energy
infrastructure
revolving
loan
fund
under
section
15
476.46A
the
portion
of
sales
tax
revenues
attributable
to
the
16
expiration
of
the
exemption
period
specified
in
all
of
the
17
following:
18
(1)
Section
423.3,
subsection
92,
paragraph
“a”
,
19
subparagraph
(2)
or
(3).
20
(2)
Section
423.3,
subsection
93,
paragraph
“a”
,
21
subparagraph
(2)
or
(3).
22
(3)
Section
423.3,
subsection
95,
paragraph
“a”
,
23
subparagraph
(2)
or
(3).
24
Sec.
67.
Section
423.3,
subsection
92,
paragraph
a,
25
subparagraphs
(2)
and
(3),
Code
2025,
are
amended
to
read
as
26
follows:
27
(2)
(a)
The
sales
price
of
backup
power
generation
fuel,
28
that
is
purchased
by
a
web
search
portal
business
for
use
in
29
the
items
listed
in
subparagraph
(1).
30
(b)
The
duration
of
the
exemption
allowed
under
this
31
subparagraph
shall
be
for
the
following
time
periods:
32
(i)
For
backup
power
generation
fuel
purchased
in
33
connection
with
real
property
for
a
web
search
portal
that
34
began
operating
prior
to
the
effective
date
of
this
division
of
35
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this
Act,
there
shall
be
no
limitation
on
the
duration
of
the
1
exemption.
2
(ii)
For
backup
power
generation
fuel
purchased
by
a
3
web
search
portal
in
connection
with
real
property
with
new
4
construction
upon
the
property
completed
on
or
after
the
5
effective
date
of
this
division
of
this
Act,
or
additions
6
upon
existing
property
on
or
after
the
effective
date
of
this
7
division
of
this
Act,
and
such
property
is
located
entirely
8
or
in
part
within
a
city
having
a
population
of
more
than
9
thirty
thousand,
according
to
the
most
recent
decennial
federal
10
census,
the
first
ten
years
of
operation
in
connection
with
the
11
new
construction
or
addition
upon
the
existing
property.
12
(iii)
For
backup
power
generation
fuel
purchased
by
a
13
web
search
portal
in
connection
with
real
property
with
new
14
construction
upon
the
property
completed
on
or
after
the
15
effective
date
of
this
division
of
this
Act,
or
additions
16
upon
existing
property
on
or
after
the
effective
date
of
this
17
division
of
this
Act,
and
such
property
of
such
a
web
portal
18
business
is
not
located
entirely
or
in
part
within
a
city
19
having
a
population
of
more
than
thirty
thousand,
according
to
20
the
most
recent
decennial
federal
census,
the
first
fifteen
21
years
of
operation
in
connection
with
the
new
construction
or
22
addition
upon
the
existing
property.
23
(3)
(a)
The
sales
price
of
electricity
purchased
for
use
in
24
providing
a
web
search
portal.
25
(b)
The
duration
of
the
exemption
allowed
under
this
26
subparagraph
shall
be
for
the
following
time
periods:
27
(i)
For
electricity
purchased
in
connection
with
real
28
property
for
web
search
portals
that
began
operating
prior
to
29
the
effective
date
of
this
division
of
this
Act,
there
shall
be
30
no
limitation
on
the
duration
of
the
exemption.
31
(ii)
For
electricity
purchased
by
a
web
search
portal
in
32
connection
with
real
property
with
new
construction
upon
the
33
property
completed
on
or
after
the
effective
date
of
this
34
division
of
this
Act,
or
additions
upon
existing
property
on
or
35
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after
the
effective
date
of
this
division
of
this
Act,
and
such
1
property
is
located
entirely
or
in
part
within
a
city
having
2
a
population
of
more
than
thirty
thousand,
according
to
the
3
most
recent
decennial
federal
census,
the
first
ten
years
of
4
operation
in
connection
with
the
new
construction
or
addition
5
upon
the
existing
property.
6
(iii)
For
electricity
purchased
by
a
web
search
portal
7
in
connection
with
real
property
with
new
construction
upon
8
the
property
completed
on
or
after
the
effective
date
of
this
9
division
of
this
Act,
or
additions
upon
existing
property
on
10
or
after
the
effective
date
of
this
division
of
this
Act,
and
11
such
property
is
not
located
entirely
or
in
part
within
a
city
12
having
a
population
of
more
than
thirty
thousand,
according
to
13
the
most
recent
decennial
federal
census,
the
first
fifteen
14
years
of
operation
in
connection
with
the
new
construction
or
15
addition
upon
the
existing
property.
16
Sec.
68.
Section
423.3,
subsection
92,
paragraph
b,
Code
17
2025,
is
amended
by
adding
the
following
new
subparagraphs:
18
NEW
SUBPARAGRAPH
.
(5)
The
web
search
portal
business
19
shall
register
with
the
department
as
a
web
search
portal.
20
To
maintain
its
registration,
the
web
search
portal
business
21
shall
file
an
annual
report
with
the
department,
by
January
31,
22
2026,
and
by
each
January
31
thereafter.
The
annual
report
23
shall
describe
the
backup
power
generation
fuel
and
electricity
24
purchased
and
used
in
the
previous
calendar
year
for
the
25
purposes
described
in
paragraph
“a”
,
subparagraphs
(2)
and
(3),
26
and
any
other
information
the
department
requires.
27
NEW
SUBPARAGRAPH
.
(6)
Beginning
after
January
31,
2026,
28
when
purchasing
exempt
property
under
paragraph
“a”
,
the
web
29
search
portal
business
shall
present
an
exemption
certificate,
30
issued
annually
to
the
web
search
portal
business
after
31
filing
the
annual
report
pursuant
to
subparagraph
(5),
to
the
32
retailer.
33
Sec.
69.
Section
423.3,
subsection
92,
paragraph
e,
Code
34
2025,
is
amended
by
adding
the
following
new
subparagraph:
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NEW
SUBPARAGRAPH
.
(03)
“Site
preparation
activities”
means
1
the
same
as
defined
in
subsection
95.
2
Sec.
70.
Section
423.3,
subsection
93,
paragraph
a,
3
subparagraphs
(2)
and
(3),
Code
2025,
are
amended
to
read
as
4
follows:
5
(2)
(a)
The
sales
price
of
backup
power
generation
fuel,
6
that
is
purchased
by
a
web
search
portal
business
for
use
in
7
the
items
listed
in
subparagraph
(1).
8
(b)
The
duration
of
the
exemption
allowed
under
this
9
subparagraph
shall
be
for
the
following
time
periods:
10
(i)
For
backup
power
generation
fuel
purchased
and
used
11
in
connection
with
real
property
for
a
web
search
portal
12
business
that
began
operating
prior
to
the
effective
date
of
13
this
division
of
this
Act,
there
shall
be
no
limitation
on
the
14
duration
of
the
exemption.
15
(ii)
For
backup
power
generation
fuel
purchased
by
a
web
16
search
portal
business
in
connection
with
real
property
with
17
new
construction
upon
the
property
completed
on
or
after
the
18
effective
date
of
this
division
of
this
Act,
or
additions
19
upon
existing
property
on
or
after
the
effective
date
of
this
20
division
of
this
Act,
and
such
property
is
located
entirely
21
or
in
part
within
a
city
having
a
population
of
more
than
22
thirty
thousand,
according
to
the
most
recent
decennial
federal
23
census,
the
first
ten
years
of
operation
in
connection
with
the
24
new
construction
or
addition
to
the
existing
property.
25
(iii)
For
backup
power
generation
fuel
purchased
by
a
web
26
search
portal
business
in
connection
with
real
property
with
27
new
construction
upon
the
property
completed
on
or
after
the
28
effective
date
of
this
division
of
this
Act,
or
additions
29
upon
existing
real
property
on
or
after
the
effective
date
30
of
this
division
of
this
Act,
and
such
real
property
is
not
31
located
entirely
or
in
part
within
a
city
having
a
population
32
of
more
than
thirty
thousand,
according
to
the
most
recent
33
decennial
federal
census,
the
first
fifteen
years
of
operation
34
in
connection
with
the
new
construction
or
addition
to
the
35
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existing
property.
1
(3)
(a)
The
sales
price
of
electricity
purchased
for
use
by
2
a
web
search
portal
business.
3
(b)
The
duration
of
the
exemption
allowed
under
this
4
subparagraph
shall
be
for
the
following
time
periods:
5
(i)
For
electricity
purchased
and
used
in
connection
with
6
real
property
for
a
web
search
portal
business
that
began
7
operating
prior
to
the
effective
date
of
this
division
of
8
this
Act,
there
shall
be
no
limitation
on
the
duration
of
the
9
exemption.
10
(ii)
For
electricity
purchased
by
a
web
search
portal
11
business
in
connection
with
real
property
with
new
construction
12
upon
the
property
completed
on
or
after
the
effective
date
of
13
this
division
of
this
Act,
or
additions
upon
existing
property
14
on
or
after
the
effective
date
of
this
division
of
this
Act,
15
and
such
property
is
located
entirely
or
in
part
within
a
city
16
having
a
population
of
more
than
thirty
thousand,
according
17
to
the
most
recent
decennial
federal
census,
the
first
ten
18
years
of
operation
in
connection
with
the
new
construction
or
19
addition
to
the
existing
property.
20
(iii)
For
electricity
purchased
by
a
web
search
portal
21
business
in
connection
with
real
property
with
new
construction
22
upon
the
property
completed
on
or
after
the
effective
date
of
23
this
division
of
this
Act,
or
additions
upon
existing
property
24
on
or
after
the
effective
date
of
this
division
of
this
Act,
25
and
such
property
is
not
located
entirely
or
in
part
within
26
a
city
having
a
population
of
more
than
thirty
thousand,
27
according
to
the
most
recent
decennial
federal
census,
the
28
first
fifteen
years
of
operation
in
connection
with
the
new
29
construction
or
addition
to
the
existing
property.
30
Sec.
71.
Section
423.3,
subsection
93,
paragraph
b,
Code
31
2025,
is
amended
by
adding
the
following
new
subparagraphs:
32
NEW
SUBPARAGRAPH
.
(5)
The
web
search
portal
business
shall
33
register
with
the
department
as
a
web
search
portal
business.
34
To
maintain
its
registration,
the
web
search
portal
business
35
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614
shall
file
an
annual
report
with
the
department,
by
January
31,
1
2026,
and
by
each
January
31
thereafter.
The
annual
report
2
shall
describe
the
backup
power
generation
fuel
and
electricity
3
purchased
and
used
in
the
previous
calendar
year
for
the
4
purposes
described
in
paragraph
“a”
,
subparagraphs
(2)
and
(3),
5
and
any
other
information
the
department
requires.
6
NEW
SUBPARAGRAPH
.
(6)
Beginning
after
January
31,
2026,
7
when
purchasing
exempt
property
under
paragraph
“a”
,
the
web
8
search
portal
business
shall
present
an
exemption
certificate,
9
issued
annually
to
the
web
search
portal
business
after
filing
10
the
annual
report
pursuant
to
subparagraph
(5)
to
the
retailer.
11
Sec.
72.
Section
423.3,
subsection
93,
paragraph
e,
Code
12
2025,
is
amended
by
adding
the
following
new
subparagraph:
13
NEW
SUBPARAGRAPH
.
(03)
“Site
preparation
activities”
means
14
the
same
as
defined
in
subsection
95.
15
Sec.
73.
Section
423.3,
subsection
95,
paragraph
a,
16
subparagraphs
(2)
and
(3),
Code
2025,
are
amended
to
read
as
17
follows:
18
(2)
(a)
The
sales
price
of
backup
power
generation
fuel
19
that
is
purchased
by
a
data
center
business
for
use
in
the
20
items
listed
in
subparagraph
(1).
21
(b)
The
duration
of
the
exemption
allowed
under
this
22
subparagraph
shall
be
for
the
following
time
periods:
23
(i)
For
backup
power
generation
fuel
purchased
in
24
connection
with
real
property
the
data
center
business
began
25
operating
prior
to
the
effective
date
of
this
division
of
26
this
Act,
there
shall
be
no
limitation
on
the
duration
of
the
27
exemption.
28
(ii)
For
backup
power
generation
fuel
purchased
by
a
29
data
center
business
in
connection
with
real
property
with
30
new
construction
upon
the
property
completed
on
or
after
the
31
effective
date
of
this
division
of
this
Act,
or
additions
32
upon
existing
property
on
or
after
the
effective
date
of
this
33
division
of
this
Act,
and
such
property
is
located
entirely
34
or
in
part
within
a
city
having
a
population
of
more
than
35
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thirty
thousand,
according
to
the
most
recent
decennial
federal
1
census,
the
first
ten
years
of
operation
in
connection
with
the
2
new
construction
or
addition
upon
the
existing
property.
3
(iii)
For
backup
power
generation
fuel
purchased
by
a
4
data
center
business
in
connection
with
real
property
with
5
new
construction
upon
the
property
completed
on
or
after
the
6
effective
date
of
this
division
of
this
Act,
or
additions
7
upon
existing
property
on
or
after
the
effective
date
of
this
8
division
of
this
Act,
and
such
property
is
not
located
entirely
9
or
in
part
within
a
city
having
a
population
of
more
than
10
thirty
thousand,
according
to
the
most
recent
decennial
federal
11
census,
the
first
fifteen
years
of
operation
in
connection
with
12
the
new
construction
or
addition
upon
the
existing
property.
13
(3)
(a)
The
sales
price
of
electricity
purchased
for
use
by
14
a
data
center
business.
15
(b)
The
duration
of
the
exemption
allowed
under
this
16
subparagraph
shall
be
for
the
following
time
periods:
17
(i)
For
electricity
purchased
in
connection
with
real
18
property
the
data
center
business
began
operating
prior
the
19
effective
date
of
this
division
of
this
Act,
there
shall
be
no
20
limitation
on
the
duration
of
the
exemption.
21
(ii)
For
electricity
purchased
by
a
data
center
business
22
in
connection
with
real
property
with
new
construction
upon
23
the
property
completed
on
or
after
the
effective
date
of
this
24
division
of
this
Act,
or
additions
upon
existing
property
on
or
25
after
the
effective
date
of
this
division
of
this
Act,
and
such
26
property
is
located
entirely
or
in
part
within
a
city
having
27
a
population
of
more
than
thirty
thousand,
according
to
the
28
most
recent
decennial
federal
census,
the
first
ten
years
of
29
operation
in
connection
with
the
new
construction
or
addition
30
to
the
existing
property.
31
(iii)
For
electricity
purchased
by
a
data
center
business
32
in
connection
with
real
property
with
new
construction
upon
33
the
property
completed
on
or
after
the
effective
date
of
this
34
division
of
this
Act,
or
additions
upon
existing
property
on
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or
after
the
effective
date
of
this
division
of
this
Act,
and
1
such
property
is
not
located
in
part
within
a
city
having
a
2
population
of
more
than
thirty
thousand,
according
to
the
most
3
recent
decennial
federal
census,
the
first
fifteen
years
of
4
operation
in
connection
with
the
new
construction
or
addition
5
to
the
property.
6
Sec.
74.
Section
423.3,
subsection
95,
paragraph
b,
7
subparagraph
(3),
Code
2025,
is
amended
to
read
as
follows:
8
(3)
The
data
center
business
shall
make
a
minimum
investment
9
in
an
Iowa
physical
location
of
two
hundred
million
dollars
10
within
the
first
six
years
of
operation
in
Iowa
beginning
with
11
the
date
the
data
center
business
initiates
site
preparation
12
activities
,
or
the
beginning
date
of
the
initial
lease
term
13
of
a
data
center,
as
applicable
.
The
minimum
investment
14
includes
the
initial
investment,
including
land
and
subsequent
15
acquisition
of
additional
adjacent
land
and
subsequent
16
investment
at
the
Iowa
location.
17
Sec.
75.
Section
423.3,
subsection
95,
paragraph
b,
Code
18
2025,
is
amended
by
adding
the
following
new
subparagraphs:
19
NEW
SUBPARAGRAPH
.
(5)
The
data
center
business
shall
20
register
with
the
department
as
a
data
center
business.
To
21
maintain
its
registration,
the
data
center
business
shall
file
22
an
annual
report
with
the
department,
by
January
31,
2026,
23
and
by
each
January
31
thereafter.
The
annual
report
shall
24
describe
the
backup
power
generation
fuel
and
electricity
25
purchased
in
the
previous
calendar
year
for
the
purposes
26
described
in
paragraph
“a”
,
subparagraphs
(2)
and
(3),
and
any
27
other
information
the
department
requires.
28
NEW
SUBPARAGRAPH
.
(6)
Beginning
after
January
31,
2026,
29
when
purchasing
exempt
property
under
paragraph
“a”
,
the
data
30
center
business
shall
present
an
exemption
certificate,
issued
31
annually
to
the
data
center
business
after
filing
the
annual
32
report
pursuant
to
subparagraph
(5),
to
the
retailer.
33
Sec.
76.
Section
423.3,
subsection
95,
paragraphs
c
and
d,
34
Code
2025,
are
amended
to
read
as
follows:
35
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c.
This
exemption
applies
from
the
date
of
the
initial
1
investment
in
,
or
the
initiation
of
site
preparation
activities
2
for
the
data
center
business
facility
,
or
from
the
beginning
3
date
of
the
initial
lease
term,
as
described
in
paragraph
“b”
.
4
d.
Failure
to
meet
eighty
percent
of
the
minimum
investment
5
amount
requirement
specified
in
paragraph
“b”
within
the
first
6
six
years
of
operation
from
the
date
the
data
center
business
7
initiates
site
preparation
activities
or
from
the
beginning
8
date
of
the
initial
lease
term,
as
applicable,
will
result
9
in
the
data
center
business
losing
the
right
to
claim
this
10
data
center
business
exemption
and
the
data
center
business
11
shall
pay
all
sales
or
use
tax
that
would
have
been
due
on
the
12
purchase
or
use
of
the
items
listed
in
this
exemption,
plus
any
13
applicable
penalty
and
interest
imposed
by
statute.
14
Sec.
77.
Section
423.3,
subsection
95,
Code
2025,
is
amended
15
by
adding
the
following
new
paragraph:
16
NEW
PARAGRAPH
.
0d.
A
data
center
business
leasing
space
to
17
operate
a
data
center
as
a
lessee
is
eligible
to
qualify
for
18
the
exemption
under
this
subsection.
19
Sec.
78.
Section
423.3,
subsection
95,
paragraph
e,
20
subparagraphs
(1)
and
(2),
Code
2025,
are
amended
to
read
as
21
follows:
22
(1)
“Data
center”
means
a
building
rehabilitated
or
23
constructed
to
house
a
group
of
networked
server
computers
24
in
one
physical
location
in
order
to
centralize
the
storage,
25
management,
and
dissemination
of
data
and
information
26
pertaining
to
a
particular
business,
taxonomy,
or
body
of
27
knowledge.
A
data
center
business’s
facility
typically
28
includes
the
mechanical
and
electrical
systems,
redundant
29
or
backup
power
supplies,
redundant
data
communications
30
connections,
environmental
controls,
and
fire
suppression
31
systems.
A
data
center
business’s
facility
also
includes
a
32
restricted
access
area
employing
advanced
physical
security
33
measures
such
as
video
surveillance
systems
and
card-based
34
security
or
biometric
security
access
systems.
“Data
center”
35
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includes
the
lease
of
a
business
facility
leased
by
an
entity
1
operating
a
data
center
business
at
that
location.
2
(2)
“Data
center
business”
means
an
entity
whose
business
3
among
other
businesses,
is
to
operate
or
lease
a
data
center.
4
Sec.
79.
Section
423.3,
subsection
95,
paragraph
e,
Code
5
2025,
is
amended
by
adding
the
following
new
subparagraph:
6
NEW
SUBPARAGRAPH
.
(3)
“Site
preparation
activities”
means
7
actions
that
are
taken
prior
to
beginning
construction
or
8
rehabilitation
of
the
building
that
will
house
the
data
center
9
and
in
preparation
for
the
construction
or
rehabilitation.
10
“Site
preparation
activities”
include
but
are
hot
limited
to
11
grading
and
clearing
of
land,
storing
of
construction
equipment
12
including
temporary
buildings
and
trailers
for
equipment
13
storage
and
for
construction
offices,
exploratory
excavating
14
and
borings
to
assess
the
sustainability
of
a
site,
and
15
clearing
the
site
of
existing
vegetation,
old
buildings,
or
16
old
equipment.
“Site
preparation
activities”
does
not
include
17
the
purchase
or
installation
of
the
tangible
personal
property
18
described
in
paragraph
“a”
,
subparagraph
(1).
19
Sec.
80.
Section
423.4,
subsection
7,
paragraph
b,
20
subparagraph
(1),
Code
2025,
is
amended
to
read
as
follows:
21
(1)
The
data
center
business
shall
make
an
investment
22
in
an
Iowa
physical
location
within
the
first
three
years
of
23
operation
in
Iowa
beginning
with
the
date
on
which
the
data
24
center
business
initiates
site
preparation
activities
,
or
25
within
three
years
of
the
beginning
date
of
the
initial
lease
26
term
of
the
data
center,
as
applicable
.
27
Sec.
81.
Section
423.4,
subsection
7,
Code
2025,
is
amended
28
by
adding
the
following
new
paragraph:
29
NEW
PARAGRAPH
.
g.
As
used
in
this
subsection,
“site
30
preparation
activities”
means
the
same
as
defined
in
section
31
423.3,
subsection
95.
32
Sec.
82.
Section
423.4,
subsection
8,
paragraph
b,
33
subparagraph
(2),
Code
2025,
is
amended
to
read
as
follows:
34
(2)
The
data
center
business
shall
make
a
minimum
35
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investment
of
at
least
ten
million
dollars,
in
the
case
of
new
1
construction,
or
at
least
five
million
dollars
in
the
case
2
of
a
rehabilitated
building,
in
an
Iowa
physical
location
3
within
the
first
six
years
of
operation
in
Iowa,
beginning
4
with
the
date
on
which
the
data
center
business
initiates
site
5
preparation
activities
or
the
beginning
date
of
the
initial
6
lease
term,
as
applicable
.
The
minimum
investment
includes
the
7
initial
investment,
including
the
value
of
a
lease
agreement
8
or
the
amount
invested
in
land
and
subsequent
acquisition
of
9
additional
adjacent
land
and
subsequent
investment
at
the
Iowa
10
location.
11
Sec.
83.
Section
423.4,
subsection
8,
Code
2025,
is
amended
12
by
adding
the
following
new
paragraph:
13
NEW
PARAGRAPH
.
h.
As
used
in
this
subsection,
“site
14
preparation
activities”
means
the
same
as
defined
in
section
15
423.3,
subsection
95.
16
Sec.
84.
Section
423.43,
subsection
1,
paragraph
a,
Code
17
2025,
is
amended
to
read
as
follows:
18
a.
Except
as
provided
in
subsection
2
subsections
2
and
3
,
19
all
revenue
arising
under
the
operation
of
the
use
tax
under
20
subchapter
III
shall
be
deposited
into
the
general
fund
of
the
21
state.
22
Sec.
85.
Section
423.43,
Code
2025,
is
amended
by
adding
the
23
following
new
subsection:
24
NEW
SUBSECTION
.
3.
All
revenues
derived
from
the
use
tax
25
imposed
pursuant
to
section
423.5
and
attributable
to
the
26
expiration
of
the
exemption
time
period
specified
in
all
of
the
27
following
shall
be
transferred
to
the
energy
infrastructure
28
revolving
loan
fund
under
section
476.46A:
29
a.
Section
423.3,
subsection
92,
paragraph
“a”
,
subparagraph
30
(2)
or
(3).
31
b.
Section
423.3,
subsection
93,
paragraph
“a”
,
subparagraph
32
(2)
or
(3).
33
c.
Section
423.3,
subsection
95,
paragraph
“a”
,
subparagraph
34
(2)
or
(3).
35
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Sec.
86.
Section
427.1,
subsection
37,
paragraph
b,
Code
1
2025,
is
amended
to
read
as
follows:
2
b.
This
data
center
business
exemption
applies
beginning
3
with
the
assessment
year
the
investment
in
or
construction
of
4
the
facility
utilizing
the
materials,
equipment,
and
systems
5
set
forth
in
paragraph
“a”
are
first
assessed
,
or
applies
6
beginning
with
the
assessment
year
in
which
the
date
of
the
7
initial
lease
term
of
a
data
center
by
a
data
center
business
8
begins,
as
applicable
.
9
Sec.
87.
EFFECTIVE
DATE.
This
division
of
this
Act,
being
10
deemed
of
immediate
importance,
takes
effect
upon
enactment.
11
DIVISION
XIII
12
ANIMAL
CARE
ORGANIZATION
CHECKOFF
13
Sec.
88.
NEW
SECTION
.
162.4B
Animal
care
organizations
——
14
fund
——
committee
——
grant
program.
15
1.
As
used
in
this
section:
16
a.
“Animal
care
organization”
means
an
animal
shelter
17
operating
pursuant
to
a
certificate
of
registration
or
a
18
renewed
certification
of
operation
issued
by
the
department
19
under
this
chapter
that
has
adopted
a
no-kill
policy,
except
20
when
medically
necessary.
21
b.
“Medically
necessary”
means
a
service
performed
by
an
22
animal
care
organization
that
is
all
of
the
following:
23
(1)
Consistent
with
the
symptoms
and
diagnosis
made
in
24
conformance
with
recommended
veterinary
practice
standards.
25
(2)
Reasonably
calculated
to
prevent,
diagnose,
correct,
26
cure,
alleviate,
or
prevent
worsening
of
a
condition
that,
left
27
untreated,
may
result
in
any
of
the
following:
28
(a)
The
end
of
life.
29
(b)
Pain,
suffering,
or
loss
of
function.
30
(c)
Infirmity.
31
2.
An
animal
care
organization
fund
is
created
in
the
state
32
treasury
under
the
control
of
the
department.
The
fund
is
33
composed
of
moneys
appropriated
or
available
to
and
obtained
34
or
accepted
by
the
treasurer
of
state
for
deposit
in
the
fund.
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The
fund
shall
include
moneys
transferred
to
the
fund
pursuant
1
to
an
income
tax
checkoff
provided
in
chapter
422,
subchapter
2
II,
if
applicable.
All
interest
earned
on
moneys
in
the
fund
3
shall
be
credited
to
and
remain
in
the
fund.
Section
8.33
does
4
not
apply
to
moneys
in
the
fund.
5
3.
Moneys
in
the
fund
that
are
authorized
by
the
department
6
for
expenditure
are
appropriated
to
the
department
and
shall
be
7
disbursed
to
animal
care
organizations
pursuant
to
subsection
8
4.
9
4.
a.
An
animal
care
organization
committee
is
created
10
within
the
department.
The
committee
shall
be
administered
11
by
the
department
and
shall
determine
the
award
of
grant
12
moneys
from
the
animal
care
organization
fund
to
animal
care
13
organizations.
The
committee
shall
distribute
all
available
14
moneys
each
year.
Applicants
for
a
grant
shall
apply
to
the
15
department
on
a
form
created
by
the
department.
16
b.
(1)
The
committee
shall
consist
of
three
voting
members:
17
(a)
One
member
appointed
by
the
secretary
of
agriculture
who
18
is
an
animal
warden.
19
(b)
One
member
appointed
by
the
secretary
of
agriculture
20
who
is
the
executive
director
or
the
director’s
designee
of
an
21
animal
rescue
organization
located
in
Iowa.
22
(c)
One
member
shall
be
a
veterinarian
appointed
by
the
23
president
of
the
Iowa
veterinary
medical
association.
24
(2)
The
appointive
terms
of
members
appointed
by
the
25
secretary
of
agriculture
shall
be
for
a
period
of
two
years.
26
If
there
is
a
vacancy
in
the
membership
of
the
board
for
one
27
of
the
members
appointed
by
the
secretary
of
agriculture,
the
28
secretary
of
agriculture
has
the
power
of
appointment.
29
Sec.
89.
NEW
SECTION
.
422.12M
Income
tax
checkoff
for
30
animal
care
organizations.
31
1.
A
person
who
files
an
individual
or
a
joint
income
tax
32
return
with
the
department
of
revenue
under
section
422.13
may
33
designate
one
dollar
or
more
to
be
paid
to
the
animal
care
fund
34
created
in
section
162.4B.
If
the
refund
due
on
the
return
or
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the
payment
remitted
with
the
return
is
insufficient
to
pay
the
1
additional
amount
designated
by
the
taxpayer
to
the
animal
care
2
organization
fund,
the
amount
designated
shall
be
reduced
to
3
the
remaining
amount
remitted
with
the
return.
The
designation
4
of
a
contribution
to
the
animal
care
organization
fund
under
5
this
section
is
irrevocable.
6
2.
The
director
of
revenue
shall
draft
the
income
tax
7
form
to
allow
the
designation
of
contributions
to
the
animal
8
care
organization
fund
on
the
tax
return.
The
department
of
9
revenue,
on
or
before
January
31,
shall
transfer
the
total
10
amount
designated
on
the
tax
return
forms
due
in
the
preceding
11
calendar
year
to
the
animal
care
organization
fund.
However,
12
before
a
checkoff
pursuant
to
this
section
shall
be
permitted,
13
all
liabilities
on
the
books
of
the
department
and
accounts
14
identified
as
owing
under
section
421.65
shall
be
satisfied.
15
3.
The
department
of
agriculture
and
land
stewardship
may
16
authorize
payment
of
moneys
from
the
animal
care
organization
17
fund
in
accordance
with
section
162.4B.
18
4.
This
section
is
subject
to
repeal
under
section
422.12E.
19
Sec.
90.
IMPLEMENTATION.
The
checkoff
created
in
this
20
division
of
this
Act
shall
be
eligible
for
placement
on
the
21
individual
income
tax
return
form
for
the
tax
year
beginning
22
January
1,
2025.
23
EXPLANATION
24
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
25
the
explanation’s
substance
by
the
members
of
the
general
assembly.
26
This
bill
relates
to
the
administration
of
the
tax
by
27
the
department
of
revenue
by
modifying
provisions
related
28
to
personal
income,
property,
sales
and
use,
motor
fuel,
29
inheritance
tax,
and
changing
tax
expenditure
reviews.
30
DIVISION
I
——
DISCLOSURE
OF
TAX
INFORMATION.
The
bill
31
specifies
and
updates
the
circumstances
the
department
of
32
revenue
(department)
may
disclose
state
tax
return
and
audit
33
information
to
law
enforcement.
The
bill
also
makes
conforming
34
changes
related
to
disclosure
of
state
tax
return
information
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to
the
treasurer
of
state
for
purposes
of
determining
ownership
1
of
abandoned
property.
2
The
division
takes
effect
upon
enactment.
3
DIVISION
II
——
ANNUAL
REPORTING.
The
bill
strikes
the
4
requirement
that
the
department
annually
report
to
the
general
5
assembly
the
areas
of
recurrent
taxpayer
noncompliance
with
the
6
rules
of
the
department
including
any
recommendations
relating
7
to
the
noncompliance.
8
DIVISION
III
——
PROPERTY
TAX
——
EXTENSIONS.
Under
current
9
law,
a
claimant
may
ask
the
director
of
the
department,
the
10
county
treasurer,
or
the
director
of
the
department
of
health
11
and
human
services
for
an
extension
to
claim
a
reimbursement
12
for
rent
constituting
property
taxes
in
case
of
sickness,
13
absence,
or
disability.
The
bill
strikes
the
director
of
the
14
department
from
involvement
in
the
extension
request
by
the
15
claimant.
16
Under
current
law,
when
issuing
a
refund
for
an
erroneous
17
property
tax
paid
by
a
taxpayer,
the
taxpayer
must
have
18
presented
a
claim
of
refund
to
the
board
of
supervisors,
or
if
19
appealed,
a
claim
to
the
property
assessment
appeal
or
district
20
court
within
two
years
of
the
final
decision
on
the
property
21
taxes
owed.
Under
the
bill,
a
taxpayer
is
eligible
to
claim
22
a
refund
for
an
erroneous
tax
if
the
taxpayer
had
previously
23
appealed
the
claim
for
a
refund
of
an
erroneous
tax
to
the
24
director
of
revenue
within
two
years
of
the
director’s
final
25
decision.
This
provision
takes
effect
upon
enactment.
26
DIVISION
IV
——
FARM
TENANCY
INCOME
TAX
EXCLUSION.
27
Currently,
an
eligible
individual
may
exclude
income
received
28
by
the
individual
pursuant
to
a
farm
tenancy
covering
real
29
property
held
by
the
individual
for
10
or
more
years,
if
the
30
individual
materially
participated
in
a
farming
business
for
31
10
or
more
years.
The
bill
allows
the
eligible
individual
to
32
exclude
such
income
under
such
circumstances,
if
the
individual
33
materially
participated
in
a
farming
business
for
10
or
more
34
years
in
the
aggregate.
The
bill
further
specifies
the
term
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“held”
is
to
be
determined
by
the
holding
period
provisions
of
1
section
1223
of
the
Internal
Revenue
Code
and
other
federal
2
regulations
which
is
identical
to
the
use
of
the
term
“held”
3
under
the
farming
business
exclusion
in
Code
section
422.7(13).
4
DIVISION
V
——
PASS-THROUGH
ENTITIES.
Under
current
law,
5
the
department
may
issue
a
notice
of
adjustment
(adjustment
of
6
tax)
to
a
partnership
or
pass-through
entity
pursuant
to
Code
7
section
422.25C,
and
specifies
that
the
notice
of
adjustment
8
is
appealable
pursuant
to
Code
sections
422.28
and
422.29.
9
The
bill
specifies
the
notice
of
adjustment
is
not
always
10
appealable
under
the
circumstances
provided
in
Code
section
11
422.25.
12
The
division
takes
effect
upon
enactment
and
applies
13
retroactively
to
January
1,
2024.
14
DIVISION
VI
——
SALES
TAX
CHANGES.
The
bill
makes
changes
to
15
the
collection
of
sales
taxes
on
building
materials,
supplies,
16
and
equipment
where
an
owner,
contractor,
subcontractor,
or
17
builder
is
also
a
retailer
holding
a
sales
and
use
tax
permit.
18
Under
such
circumstances,
if
a
customer
of
the
retailer
19
purchases
tangible
personal
property
from
the
retailer,
the
20
bill
provides
that
such
property
will
not
be
subject
to
sales
21
tax
if
the
property
will
be
subject
to
sales
tax
at
resale
at
a
22
later
date
or
if
the
property
will
be
subject
to
use
tax
at
the
23
time
the
retailer
withdraws
the
property
from
inventory
for
use
24
by
the
retailer
in
construction.
The
bill
makes
other
related
25
changes
to
enhance
the
readability
of
the
provision.
26
Under
current
law,
a
purchaser,
user,
and
consumer
of
27
taxable
property
or
services
may
be
authorized
to
remit
tax
28
owed
directly
to
the
department
instead
of
the
tax
being
29
collected
and
paid
by
the
seller.
The
bill
specifies
that
in
30
order
to
qualify
for
the
direct
pay
tax
permit
such
a
taxpayer
31
must
accrue
a
tax
liability
of
more
than
$8,000
on
a
monthly
32
basis.
Currently,
such
a
taxpayer
must
accrue
a
tax
liability
33
of
$4,000
on
a
semimonthly
basis
in
order
to
qualify
for
the
34
direct
pay
tax
permit.
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DIVISION
VII
——
MOTOR
FUEL
TAXES.
Under
current
law
and
1
before
July
1,
2026,
the
department
determines
the
rate
of
2
excise
tax
imposed
on
each
gallon
of
ethanol
blended
gasoline
3
based
upon
the
distribution
percentage
calculated
in
Code
4
section
452A.3(1)(b),
and
the
excise
tax
rate
imposed
on
each
5
gallon
of
biodiesel
blended
fuel
based
on
the
distribution
6
percentage
calculated
in
Code
section
453A.3(3)(a)(2).
The
7
department
determines
the
distribution
percentage
based
upon
8
data
from
reports
filed
pursuant
to
Code
section
452A.33.
The
9
bill
allows
the
department
to
amend
the
initial
distribution
10
percentage
due
to
a
mistake,
or
if
there
is
a
late
report
filed
11
by
a
retail
dealer
to
the
department,
or
the
distribution
12
percentage
is
not
accurate.
13
The
bill
changes
the
due
date
of
a
biannual
tax
return
14
relating
to
electric
fuel
tax
due
in
January
by
one
day,
and
15
modifies
the
biannual
tax
period
by
one
day.
16
The
bill
allows
a
person
who
uses
electric
fuel
for
a
17
nontaxable
purpose
to
provide
an
exemption
certificate
to
18
the
license
holder
selling
or
dispensing
the
fuel,
if
the
19
certificate
is
produced
by
the
department.
20
DIVISION
VIII
——
INHERITANCE
TAX
——
FUTURE
CODE
CHANGES
DUE
21
TO
REPEAL.
The
bill
changes
numerous
Code
sections
to
reflect
22
the
repeal
of
the
inheritance
tax
beginning
for
the
estates
of
23
decedents
dying
on
or
after
January
1,
2025.
However,
other
24
provisions
of
Code
chapter
450
relating
to
the
inheritance
25
tax
have
not
been
repealed.
The
division
takes
effect
upon
26
enactment
and
applies
retroactively
to
the
estates
of
decedents
27
dying
on
or
after
January
1,
2025.
28
DIVISION
IX
——
LUMP
SUM
DISTRIBUTION
OF
RETIREMENT
INCOME.
29
Under
current
law,
commencing
with
tax
years
beginning
on
or
30
after
January
1,
2023,
retirement
income
is
not
subject
to
31
Iowa
individual
income
tax.
However,
under
current
law
a
lump
32
sum
distribution
from
a
retirement
account
is
subject
to
Iowa
33
income
tax
under
Code
section
422.5(8)
at
a
rate
of
25
percent
34
of
the
federal
tax
rate
imposed
on
the
amount
of
the
lump
sum
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distribution.
1
The
bill
provides
that
the
taxation
of
a
lump
sum
2
distribution
from
a
retirement
account
is
also
exempt
from
3
state
taxation
by
exempting
the
lump
sum
distribution
for
a
4
person
who
is
disabled,
or
55
years
of
age
or
older,
or
who
is
5
the
surviving
spouse
of
an
individual
or
is
a
survivor
having
6
an
insurable
interest
in
an
individual
who
would
have
qualified
7
for
the
exemption
for
the
tax
year.
8
The
bill
excludes
the
lump
sum
distribution
exempt
from
9
state
taxation
from
being
included
in
calculating
the
10
individual
income
tax
filing
thresholds
in
Code
section
11
422.5(2)
and
(3).
12
The
division
takes
effect
upon
enactment
and
applies
13
retroactively
to
tax
years
beginning
on
or
after
January
1,
14
2025.
15
DIVISION
X
——
ESTIMATED
TAX
THRESHOLD.
Under
the
bill,
16
a
taxpayer
filing
a
return
is
required
to
make
estimated
17
tax
payments
if
Iowa
income
tax
liability
can
reasonably
be
18
expected
to
exceed
$1,000
or
more.
Under
current
law,
such
19
a
taxpayer
filing
a
return
is
required
to
make
estimated
20
tax
payments
if
Iowa
income
tax
liability
can
reasonably
be
21
expected
to
exceed
$200
or
more.
22
The
division
takes
effect
January
1,
2026,
and
applies
to
tax
23
years
beginning
on
or
after
that
date.
24
DIVISION
XI
——
TAX
EXPENDITURE
REVIEW.
The
bill
specifies
25
that
the
department
administering
a
tax
expenditure
(tax
26
credit)
is
not
required
to
review
the
tax
expenditure
if
the
27
tax
expenditure
has
been
repealed
or
if
a
zero
amount
of
the
28
tax
expenditure
remains
available
to
be
awarded
or
claimed.
29
The
bill
removes
four
tax
expenditures
from
tax
expenditure
30
review:
the
Iowa
fund
of
funds
program
in
Code
chapter
15E,
31
the
wind
energy
production
tax
credits
under
Code
chapter
476B,
32
the
ethanol
promotion
tax
credit
in
Code
section
422.11N
(Code
33
2006),
and
the
minimum
tax
credit
under
Code
section
422.11B
34
(Code
2018).
The
bill
amends
the
Acts
to
align
the
review
of
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the
renewable
chemical
production
tax
credit
in
Code
section
1
2.48
with
the
future
repeal
of
the
renewable
chemical
tax
2
credit
program.
3
DIVISION
XII
——
LIMITATIONS
ON
SALES
TAX
EXEMPTIONS
AND
4
REFUNDS
AND
TRANSFERS
TO
THE
ENERGY
INFRASTRUCTURE
FUND.
The
5
bill
modifies
the
sales
and
use
tax
exemptions
(exemptions)
6
related
to
web
search
portal
businesses
and
data
center
7
businesses
(data
centers).
The
division
take
effect
upon
8
enactment
(effective
date).
9
Currently,
the
exemptions
apply
to
the
sale
of
computers
10
and
equipment
for
the
maintenance
and
operation
of
a
data
11
center,
the
sale
of
backup
power
generation
fuel,
and
the
12
sale
of
electricity
for
use
in
the
data
center,
without
any
13
limitations.
The
bill
does
not
change
the
exemptions
available
14
for
data
centers
that
began
operating
prior
to
the
effective
15
date.
16
The
bill
limits
the
exemptions
for
newly
constructed
data
17
centers
or
additions
upon
existing
property
completed
on
or
18
after
the
effective
date,
to
the
first
10
years
of
operation,
19
if
the
property
is
located
entirely
or
partly
within
a
city
20
having
a
population
of
more
than
30,000.
21
The
bill
limits
the
exemptions
for
newly
constructed
data
22
centers
or
additions
upon
existing
property
completed
on
or
23
after
the
effective
date,
to
the
first
15
years
of
operation,
24
if
the
property
is
not
located
entirely
or
partly
within
a
city
25
having
a
population
of
more
than
30,000.
26
Currently,
the
exemptions
apply
from
the
date
the
initial
27
investment
occurs
or
the
initiation
of
site
preparation
28
activities.
The
bill
defines
“initiation
of
site
preparation
29
activities”.
30
The
bill
requires
a
data
center
to
register
with
the
31
department
of
revenue
beginning
January
31,
2026,
and
file
an
32
annual
report
with
the
department
describing
the
backup
power
33
generation
fuel
and
electricity
used
to
obtain
the
exemption,
34
and
describe
any
other
information
the
department
of
revenue
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may
require.
The
bill
requires
a
data
center
to
present
an
1
exemption
certificate,
issued
annually
to
the
data
center
after
2
filing
the
annual
report,
to
the
retailer
selling
the
backup
3
power
generation
fuel
and
the
electricity
to
the
data
center.
4
The
bill
provides
that
a
business
leasing
space
to
operate
5
a
data
center
as
a
lessee
is
eligible
to
qualify
for
an
6
exemption.
A
data
center
includes
the
lease
of
a
business
7
facility
leased
by
an
entity
operating
a
data
center
at
the
8
location
of
the
data
center.
The
bill
specifies
the
exemptions
9
apply
from
the
beginning
date
of
the
initial
lease
term.
10
After
the
data
center
exemption
period
expires,
the
bill
11
requires
the
portion
of
sales
tax
revenue
attributable
to
12
the
previously
exempted
sale
of
backup
power
generation
fuel
13
and
electricity
be
transferred
to
the
energy
infrastructure
14
revolving
loan
fund
in
Code
section
476.46A.
15
DIVISION
XIII
——
ANIMAL
CARE
ORGANIZATION
CHECKOFF.
The
16
bill
provides
that
taxpayers
filing
individual
income
tax
17
returns
will
be
allowed
to
designate
$1
or
more
on
the
return
18
to
be
paid
to
the
animal
care
organization
fund
(fund).
The
19
bill
creates
the
fund
in
the
state
treasury
under
the
control
20
of
the
department
of
agriculture
and
land
stewardship.
The
21
bill
requires
the
department
of
revenue
to
annually
remit
22
moneys
collected
from
the
checkoff
to
the
fund.
23
The
bill
provides
that
the
checkoff
is
eligible
for
24
placement
on
the
individual
tax
return
form
for
the
tax
year
25
beginning
January
1,
2025,
and
that
it
is
subject
to
repeal
26
under
Code
section
422.12E,
which
allows
no
more
than
four
27
checkoffs
on
the
individual
tax
return
form
and
provides
for
28
the
automatic
repeal
of
the
two
checkoffs
receiving
the
least
29
in
contributions
over
a
two-year
period.
Currently,
there
are
30
two
checkoffs
that
appear
on
the
individual
income
tax
return,
31
the
checkoff
for
the
fish
and
game
protection
fund
and
the
32
checkoff
for
the
child
abuse
prevention
program
fund.
33
Moneys
in
the
fund
shall
be
used
by
an
animal
care
34
organization
committee
(committee)
to
provide
grants
to
animal
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care
organizations.
The
committee,
which
is
created
within
1
and
administered
by
the
department
of
agriculture
and
land
2
stewardship,
shall
consist
of
three
members:
one
member
3
appointed
by
the
secretary
of
agriculture
who
is
an
animal
4
warden,
one
member
appointed
by
the
secretary
of
agriculture
5
from
the
executive
director
or
the
director’s
designee
of
an
6
animal
rescue
organization
in
this
state,
and
a
veterinarian
7
appointed
by
the
president
of
the
Iowa
veterinarian
medical
8
association.
9
The
bill
defines
“animal
care
organization”
to
mean
10
an
animal
shelter
operating
pursuant
to
a
certificate
of
11
registration
or
a
renewed
certification
of
operation
issued
by
12
the
department
of
agriculture
and
land
stewardship
under
Code
13
chapter
162
(animals
in
commercial
establishments)
that
has
14
adopted
a
no-kill
policy,
except
when
medically
necessary.
The
15
bill
defines
“medically
necessary”.
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